Posts with tag: remortgaging

Conveyancing Portal Reports Strong End of Year Following Brexit

Published On: January 19, 2017 at 9:23 am


Categories: Property News

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An award-winning conveyancing portal, SortRefer, has reported a strong end of the year following June 2016’s Brexit vote.

Conveyancing Portal Reports Strong End of Year Following Brexit

Conveyancing Portal Reports Strong End of Year Following Brexit

The firm witnessed an upward swing in conveyancing activity after the shock of the Brexit outcome had dissipated.

The number of users on the conveyancing portal rose by 4% by the end of 2016, following a dip caused by Brexit uncertainty. In the two months after the Brexit vote, conveyancing business dropped, but, by November, overall instructions had increased by 5% over the pre-vote figures.

In line with the latest data from the Council of Mortgage Lenders (CML), SoftRefer reports a significant increase in remortgage instructions, which rose by 19% in the six months following the vote.

Buy-to-let instructions were up by 6% over the same period, suggesting that landlords are still keen to purchase investment properties ahead of the forthcoming reduction in mortgage interest tax relief.

According to the firm’s Kevin Tunnicliffe, 2016 was the year of surprises in the property market.

He says: “We should have realised that if Leicester City could win the Premier League title, then anything was capable of being overturned and so it transpired. The result of the Brexit vote, no matter on which side of the issue you stood, was a complete surprise. After the initial shock and the realisation that the world had not stopped spinning, activity came back to normal for us and, in fact, we ended the year very strongly.

“I think pundits will be very cautious about their predictions for 2017 after what happened in 2016. As the CML is suggesting, only a small percentage increase in likely lending levels this year, I think that is a clue to how we should all view the prospects for 2017.”

Indeed, it will be interesting to observe how the forecasts change and develop following Theresa May’s crucial speech on the UK’s Brexit strategy on Tuesday.

New Buy-to-Let Lending Remains Flat, but Remortgages are High

Published On: January 18, 2017 at 11:16 am


Categories: Finance News

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New buy-to-let lending remained flat at the end of last year, but remortgages in the sector are high, distorting the outlook for the market, according to the Council of Mortgage Lenders (CML).

Instead, home movers and first time buyers dominated mortgage lending in November 2016 – the latest month for which data is available.

House purchase loans

New Buy-to-Let Lending Remains Flat, but Remortgages are High

New Buy-to-Let Lending Remains Flat, but Remortgages are High

Lending to homeowners increased by 5% between October and November, to a total of £11 billion, up by 2% on an annual basis. Homeowners took out 60,800 loans, up by 5% on the previous month and 0.2% over the year.

First time buyers borrowed £4.7 billion, up by 4% month-on-month and 9% on November 2015. This equated to 30,100 loans, up by 5% on October and 8% annually.

Meanwhile, home movers borrowed £6.3 billion, up by 7% on the previous month, but down 5% compared with November 2015. This represented 30,700 loans, up by 6% on a monthly basis, but down 6% year-on-year.

Buy-to-let lending

Buy-to-let lending reached £3.2 billion in November last year, up by 10% on October, but down 9% on an annual basis. Landlords borrowed 21,000 loans in total, up by 13% on the month, but down 10% when compared to November 2015.

The CML reports that these figures make it look like buy-to-let lending has returned to times before the Stamp Duty rush, when 23,500 loans were recorded in March 2016 and 21,900 in April 2016, before dropping to around 18,000 each month for the rest of the year.

But the latest figures are slightly skewed by remortgages, as this type of loan actually made up 14,000 of the 21,000 loans lent in the buy-to-let sector.

The CML data also shows that the proportion of household income used to service capital and interest rates reached another historic low in November for both first time buyers and home movers, at 17.5%.

The Director General of the CML, Paul Smee, comments on the figures: “November lending reflected stable market conditions. Overall, 2016 did not match recent years in terms of house purchase lending growth, but lending remained resilient through regulatory and political change, and aspirations for homeownership remain strong in the UK.

“Our forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the market, but we still predict 1.2m transactions and a slight increase in gross lending to £248 billion.”

He looks at the buy-to-let sector: “Buy-to-let lending, driven by remortgage activity, saw its strongest monthly lending level since the Stamp Duty changes on second properties introduced last April. Despite this, we expect buy-to-let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peak, as further tax changes take effect.”

Buy-to-let lending levels after remortgaging surge

Published On: January 11, 2017 at 10:38 am


Categories: Finance News

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The latest Mortgages for Business report shows that despite remortgaging activity still being most prominent in the buy-to-let market, purchase lending returned to higher levels in the final quarter of 2016.


Standard buy-to-let (vanilla) transactions increased from 28% in Q3 to 38% in Q4. In addition, lending for HMO properties rose to 26%. Despite this being below the level seen in Q2 2016, this sees the market return to levels seen before the changes to landlords’ tax relief in 2015.

David Whittaker, CEO of Mortgages for Business said: ‘It is encouraging to see that the share of lending for purchase in the buy to let mortgage market returned to normal in Q4 2016. Following a notable shift towards lending for remortgage in the third quarter, landlords showed they were once again willing to commit to new purchases. The outcome of the EU Referendum, and the subsequent macro-economic uncertainty dampened purchase lending in Q3, with many landlords initially opting for a cautious approach.’[1]

‘While changes to Stamp Duty on second properties and landlords’ tax relief mean that landlords need to approach their investments intelligently, there are still excellent returns to be had in the market – especially compared to other asset classes,’ he continued.[1]

Buy-to-let lending levels after remortgaging surge

Buy-to-let lending levels after remortgaging surge

Loan to Values

In addition, data from the report shows that the average loan to value (LTV) ratios for all products stayed fairly constant at 67% in Q4 of 2016.

Interestingly, there was a substantial upturn in both the values and loan size for the multi-block unit mortgage market. This was due to the rise in the number of mortgages being taken out on high-value multi-unit properties. 30% of these transactions in the period were for properties valued over £1m.

Concluding, Whittaker said: ‘There is clearly an appetite among investors for more valuable multi-unit blocks, with the lending share of million-pound plus blocks from growing under a fifth in Q3 to almost a third in Q4.’[1]


Buy-to-let mortgage costs fall by 8%

Published On: September 12, 2016 at 8:57 am


Categories: Finance News

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A number of buy-to-let landlords are continuing to benefit from the ongoing reductions of mortgage costs.

Lenders across the industry are still cutting percentage points off their most generous deals in an attempt to attract more business from buy-to-let landlords looking to remortgage property.


New market analysis from Mortgage Brain shows that the costs of buy-to-let mortgages have fallen by up to 8% in the last six months.

Data from the report shows that the cost of a typical five-year fixed buy-to-let loan with a LTV of 70% is 8% less than in March 2016.

The current average rate of 2.8% indicates that there is a potential for yearly savings of £738 on a mortgage worth £150,000.

Economists have predicted that the Bank of England is likely to announce a further cut to the base rate in November. Some have forecasted that the rate could be cut to as little as 0.1%, meaning that mortgage costs could fall even further at the end of 2016.

Buy-to-let mortgage costs fall by 8%

Buy-to-let mortgage costs fall by 8%

Interesting future

Mark Lofthouse, CEO of Mortgage Brain, noted, ‘with further interest rate cuts predicted by the Bank of England it will be interesting to see what happens to mortgage rates and costs over the next few months.’[1]

‘There’s no doubt though that on the whole borrowers and potential buy-to-let investors are in a great position to take advantage of the low rates and cost reductions that we’re seeing,’ he added.[1]


Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

Published On: August 9, 2016 at 10:34 am


Categories: Finance News

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Accord Buy to Let has reduced rates on its entire fixed rate buy-to-let range by up to 0.3% and has launched new remortgage options on its three and five-year fixed rate products.

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

The new buy-to-let range from the Yorkshire Building Society Group’s intermediary-only lender includes a new two-year fixed rate deal at 1.94% with a £800 fee available to remortgaging landlords at 60% loan-to-value (LTV), with a free standard valuation and standard legal fees included.

Accord Buy to Let is also offering a three-year fixed rate product at 2.64% at 65% LTV, with an £800 fee. The mortgage comes with £500 cashback on completions for landlords expanding their portfolios, along with a free standard valuation and standard legal fees for remortgages.

The lender has also updated its five-year remortgage deal, available at 3.09% at 60% LTV, with the same £800 fee and a choice of either a free standard valuation and £300 cashback on completions, or a free standard valuation and standard legal fees.

The Commercial Manager at Accord Buy to Let, Chris Maggs, comments: “We have reduced rates across our entire fixed range to ensure we are offering competitive options to suit all circumstances.

“We also hope the added incentives such as cashback on completion and free standard valuations will prove popular with brokers and landlords looking to get the most from a mortgage.”

Many landlords will be seeking the most competitive buy-to-let mortgage deals at this time, as they face tax hikes and new regulations.

As of 1st April this year, landlords must now pay an extra 3% in Stamp Duty when they purchase a rental property.

In addition, the amount of tax relief that landlords can claim on their mortgage interest payments will be cut from April next year. The change will affect many landlords, as it may push some investors into the higher tax bracket.

Furthermore, landlords must be aware of forthcoming legislative changes regarding energy efficiency. From 2018, all rental properties must have an energy efficiency rating of E or above. One investor has spoken out insisting that the Government should support landlords with these costs.

Take a look at Accord’s updated range to see whether investing further into the buy-to-let sector is viable for you.

Remortgage Activity Fuelling the Buy-to-Let Sector

Published On: March 11, 2016 at 3:16 pm


Categories: Finance News

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New figures from the Council of Mortgage Lenders (CML) reveal that remortgage activity is fuelling growth in the buy-to-let sector.

The latest data shows that home purchase lending in the UK was stagnant in January, but remortgage activity was boosted by a series of low deals.

The CML statistics are now available on an unadjusted basis for the first time, giving a more complete picture, as it is now easier to spot underlying trends, according to the Director General, Paul Smee.

He explains that while the unadjusted data appears to show significant monthly declines, taking away the traditional January lull provides a different picture.

“We see a general picture of flat house purchase lending but a significant uptick in remortgage activity, as borrowers continue to seek attractive new deals, despite the lower-for-longer expectations for interest rates,” Smee says.

The figures indicate that homeowners borrowed £8.4 billion for house purchase in January, down by 25% on the month, but up by 12% annually. They took out 46,200 loans, down 27% on the previous month and up 5% on last year.

First time buyers borrowed £3.3 billion in January, down by 27% from December, but up 14% on January 2015. This totalled 21,400 loans, down 28% monthly, but up 6% year-on-year.

Home movers borrowed £5.1 billion, down by 24% on the previous month, but up 11% compared with last year. They took out 24,800 loans, down 26% month-on-month, but up 3% on the previous year.

Homeowners remortgaging borrowed £5.8 billion, up by 35% on the previous month and 32% compared to 2015. This totalled 33,100 loans, up by 28% on the month and 19% annually.

Remortgage Activity Fuelling the Buy-to-Let Sector

Remortgage Activity Fuelling the Buy-to-Let Sector

Buy-to-let landlords borrowed £3.7 billion in January, up 9% on the month and a huge 42% over the year. Of a total of 23,100 loans, 13,400 were for remortgage, up by 3% on December and 31% compared with January 2015.

The Chief Executive of estate agent Marsh & Parsons, Peter Rollings, notes that with interest rate rises postponed until next year or beyond, remortgage activity is going from strength to strength, hitting its highest monthly rate for seven years.

“Landlords are in more of a hurry and don’t have long left to snap up investment properties before being struck with more debilitating Stamp Duty,” he says. “As a result, this storming growth in buy-to-let borrowing is likely to be short lived, and be balanced out by a more sedate second quarter of the year.”

He continues: “But Government support schemes have proved a tonic for first time buyers, and this is likely to provide good vitals throughout 2016 as a whole.

“Existing homeowners should be feeling revived too, as house prices show healthy improvements, triggering many to make the plunge and start trading up. It’s supply of homes on the property market that is the fly in the ointment currently, and is the biggest threat to quashing this confidence.”1 

The Managing Director of Mortgages for Business, David Whittaker, explains that in the buy-to-let sector, lending is expected to slow down after the rush to beat the 3% Stamp Duty surcharge, which is set to come into force on 1st April.

He says: “Given it takes six to eight weeks on average to process a mortgage application, January and early February represented the last chance for those landlords seeking to beat the surcharge. But equally, the strong annual growth in buy-to-let lending reflects the fact that the sector continues to remain an attractive investment opportunity for those with the patience to wait for steady, long-term returns.

“Looking forward, we expect lending to calm in the second quarter of the year once the Stamp Duty change kicks in and the focus turns to restrictions on buy-to-let finance costs. It is this, rather than the Stamp Duty, which will really change the way the sector operates, as the Government seeks to foster a more business-like tax environment for buy-to-let.”1 

However, Peter Williams, the Executive Director of the Intermediary Mortgage Lenders Association, states that it is clear that remortgage activity is fuelling the buy-to-let sector, with almost 4,000 more landlords motivated to switch their deal in January than take out a loan to purchase a new property.

He points out that remortgaging has increased from 55% of buy-to-let loans in January 2015 to almost 59% this year, which he believes is unsurprising, as the forthcoming changes to landlord taxes have prompted many landlords to reassess their finances.

Williams explains: “The impending Stamp Duty shake-up is a clear incentive for landlords to seek to complete on any new purchases before April, but the 8% monthly drop in buy-to-let purchases in January certainly does not look much like a stampede or cause for concern.

“Either way, these policy changes mean we are in yet another period of adjustment, where lending levels are being impacted by a shift from one regime to the next, making it harder to pinpoint what normal activity now looks like.”

He continues: “What’s certain is that the UK housing market needs a healthy private rental sector to remain beyond April 2016, if it is to respond to population increases and rising tenant demand. With the consultation on buy-to-let lending controls closing tomorrow, it seems premature in the extreme for policymakers to take further action that might ultimately weigh down too heavily on this important part of the market.”1 

And Steve Bolton, the Founder of Platinum Property Partners, and one of the landlords challenging the reduction in mortgage interest tax relief, claims that landlords have been taking full advantage of record low mortgage rates.

“In the short term, Stamp Duty changes are likely to provide a boost to buy-to-let lending,” he says. “However, landlords who aren’t yet nearing completion will find themselves running up against the clock to avoid being stung by a higher bill.”

He believes: “It makes sense for landlords to minimise their mortgage costs now by swapping to a cheaper deal, as legislative changes on the horizon threaten to make the cost of running a buy-to-let business much higher.

“The phasing out of tax relief on mortgage interest will lead to some landlords running at a loss, and it’s not just landlords who will suffer; tenants will also be hit by higher rents as landlords struggle to stay profitable. Inevitably, some landlords will be forced to leave the sector altogether, further shrinking property supply at a time when more homes are desperately needed.”1

The CEO of Oblix Capital, Rishi Passi, also notes that the EU referendum in June, alongside the tax changes, could affect the buy-to-let lending sector.